Problem 5-2 (IAA) i eldvec emodInterlink Company was authorized to issue 10-year, 12%bonds with face amount of P8,000,000. The bonds are datedJanuary 1, 2020, and interest is payable semiannually onJune 30 and December 31. The bonds were sold as follows:January 1, 2020September 1, 20215,000,000 at 952,000,000 at 103 plus accrued interestRequired:1. Prepare journal entries relating to the bonds payable in2020 and 2021.Straight line amortization is used, and unissued bondspayable account is set up.2. Show how information relative to the bond issue will bereported in the statement of financial position preparedon December 31, 2021.185

Bond Issue Bond can be issue either par value ,discount and premium. The purpose of issuing the…

Required: 1. Prepare journal entries relating to the bonds payable in 2020 and 2021. Straight line amortization is used, and unissued bonds payable account is set up. 2. Show how information relative to the bond issue will be reported in the statement of financial position prepared on December 31, 2021.

Required: 1. Prepare journal entries relating to the bonds payable in 2020 and 2021. Straight line amortization is used, and unissued bonds payable account is set up. 2. Show how information relative to the bond issue will be reported in the statement of financial position prepared on December 31, 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 2024, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Payment Cash Payment Effective Interest Increase in Balance Outstanding Balance 6,095,749 1 228,000 243,830 15,830 6,111,579 2 228,000 244,463 16,463 6,128,042 3 228,000 245,122 17,122 6,145,164 4 228,000 245,807 17,807 6,162,971 5 228,000 246,519 18,519 6,181,490 6 228,000 247,260 19,260 6,200,750 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 38 228,000 295,564 67,564 7,456,656 39 228,000 298,266 70,266 7,526,922 40 228,000 301,078 73,078 7,600,000 Required: What is the face amount of the bonds? What is the initial selling price of the bonds? What is the term to maturity in years? Interest is determined by what approach? What is the stated annual interest rate? What is the effective annual interest rate? What is the total cash interest paid over the term to maturity? What is the total effective interest…
Crane Company issued $1,730,000 of bonds on January 1, 2022. (a) Prepare the journal entry to record the issuance of the bonds if they are issued at (1) 100, (2) 97, and (3) 105. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation (1) (2) (3) Debit Credit
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